Adam Smith Institute

I wish we could stop flogging a dead horse. Sadly, the politicians won’t let us. They just keep insisting that subsidies and trade restrictions are good ideas. The Independent reports today that the Common Agriculture Policy (CAP) adds almost £900 each year to UK food bills. Much has and more could be written about how these subsidies hurt the average person in the EU. But, as Maxine Firth wrote:

CAP is one of the biggest iniquities facing farmers in Africa and other developing counties. They cannot export their products because they compete with the lower prices made possible by payments. In addition, European countries dump thousands of tons of subsidised exports in Africa every year so that local producers cannot even compete on a level playing field in their own land.

All of this is not to say the EU is the only culprit. Trade policies in Africa are prohibitively restrictive. However, the EU, UN, the US, and dozens of other countries, NGOs and IGOs try to solve Africa’s problems with foreign aid. Here’s a better idea: Let them produce and compete! Let free trade work. A couple of weeks ago, The Economist reported that 250m of the 270m people lifted from poverty since 1990 were Chinese. Is this because of foreign aid to China? Absolutely not! The Chinese government made capitalist reforms, and foreign nations opened up trade. Although China has a long way to go, it has come a long way and is now freer than it has ever been. Africa is different, but requires the same approach—internal and external changes to trade policy.

Perhaps an introductory course in economics would serve our politicians well.

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